There are several milestones to look forward to in life, such as learning to drive, travelling, starting a family, or moving into your first home.
Saving for your first home is no mean feat, and it’s normal to feel overwhelmed at the prospect. With over 160 years’ experience, we’ve been supporting our customers with their financial needs and helping them to save for their first home with a range of products, from easy access savings accounts to fixed rate bonds.
Find out how much you’ll need to save
If you’re hoping to purchase your first home, it’s important to establish the financial costs first, so you’ll have a figure to work towards. For many, the mortgage deposit will be the biggest expense; a percentage of the property price that you’ll need to pay up front before taking ownership of your new home.
Alongside your mortgage deposit, there will be other costs to cover, including solicitor’s and mortgage fees and the cost of furnishing your home. Work out how much you’ll need to save to cover these costs and get saving!
Start a budget
Once you know how much you’ll need to save, start budgeting and set aside some money each month towards your goal. A budget can help you split your hard-earned income into categories that include; essentials, things you want, and savings.
The 50/20/30 rule could be a great place to start. Set 50% of your income aside for essentials like food and household bills, including any rent you’re currently paying, then set aside 20% for savings, and 30% for discretional spending. This should give a balanced approach to make saving easier, but if you want to reach your goal faster, consider changing the proportion of money you’re saving versus spending.
Make your goals achievable
Breaking your long-term goals into small, achievable targets can also help. For example, if a 10% deposit feels unachievable, save 5% first, then lock it away and start saving again. It’s important to stay committed and maintain your savings with regular top-ups where possible.
If you’d still like to save more, it can be useful to review your outgoings to make sure you’re not spending unnecessarily and that you’re getting the best deals on your essential outgoings. Revisit the 50/20/30 rule and make some tweaks.
Make the most of your savings
As your money builds up, ask yourself: “Am I getting the best deal?”. There are a variety of different savings accounts to choose from depending on your circumstances, so reviewing your options even after you’ve started saving can be a good idea.
What are the options?
If you’re willing to lock away a lump sum of money that you’ve already saved for a set period of time; usually 2-5 years, then a fixed rate bond could be right for you, and you’ll usually receive a higher, fixed rate of interest.
Alternatively, you could consider saving into a notice account. As the name suggests, you’ll need to give notice before you withdraw (typically between 30-120 days).
It’s important to read the terms and conditions of an account before you open it to make sure you’re aware of how it operates. Most providers have restrictions in place and closing or making withdrawals from a fixed or notice savings account before its maturity date might not be possible.
If you’re approaching your property’s completion date, and you think you’ll need access to your money, an easy access savings account may be more suitable, which gives you the flexibility to withdraw money when you need to.
Choosing to save your money in an ISA (Individual Savings Account) means that you can save tax-free up to the ISA allowance. The allowance is reviewed annually by the Government and is currently £20,000 for the 2021/2022 tax year. There are a range of ISAs to choose from depending on your chosen provider.
How can the Marsden help?
Our friendly branch teams are on hand to answer any questions you may have about our products or services, so if you’re looking for a new savings account for your hard-earned cash, we could help.